PayPal Beacon: Marketing Personalization Asset or New Data Silo?

Cassie Young

Cassie Young

Last week PayPal unveiled Beacon, a new gadget designed to “reinvent the in-store shopping experience,” namely by allowing for hands-free customer payments and empowering retailers to personalize customer visits. As passionate proponents of building unique customer experiences, we at Sailthru were excited to read about the announcement, but think it’s worth highlighting that in-store optimization is really just the tip of the proverbial “iceberg” when it comes how customer relationship management (CRM) is poised to be transformed in the months and years to come. Bottom line: it’s not just the in-store experience that needs to be reinvented, but the entire omnichannel customer experience.

The hands-free payment component of Beacon is an exciting development for driving in-store conversion. Removing friction from the equation almost always drives tangible incremental revenue – just think about why Amazon has long relied on “one-click” checkout. Moreover, it would not surprise us if stores saw average basket sizes increase once the traditional register experience is replaced (less time for deliberation!).

With regards to personalization, however, Beacon must be careful to avoid the trappings of becoming yet another data silo. While the ability for a store associate to auto-recognize customers based on names and pictures being passed to the point-of-sale (POS) system is helpful, it is only surface-level personalization. It’s similar to a brand pulling my first name into an email subject line to feign real relevance.

The real opportunity for personalization comes from building a true, 360-degree profile of an end user so that all of the data on a given customer lives in one place and can be easily acted on; in other words, what if the in-store associate knew that a visitor had purchased three items online last week? What if the associate knew that the shopper did not have the mobile app and could tell them about it in the store (and potentially offer a discount for downloading)? Based on last week’s announcement, it seems as though the opportunity for “personalization” will be limited to PayPal’s own data.

Omnichannel understanding is something that is incredibly top of mind for us at Sailthru. We have sought not only to build a single platform for storing all of the disparate data sets retailers collect, but to also make those 360-degree profiles as meaningful and actionable as possible. This is the essence of what we call “Smart Data.” With this actionable information, brands can truly revolutionize the way they build and maintain relationships with their customers over time.

This all said, with all advances in omnichannel personalization comes a mission-critical need to respect the end user, as privacy concerns are certainly not going anywhere. In the PayPal example, customers will be presented with an option to check in (i.e. they are not opted-in to the Beacon push notifications by default). Personalization is undoubtedly an incredibly powerful thing, but there will forever be a fine line between Big Data and “Big Brother,” so businesses must always remain mindful and smart in balancing profit potential with providing comfortable and trustworthy customer experiences.

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Cassie Lancellotti-Young is the VP of Client Optimization & Analytics at Sailthru where she is leading the revolution around 360-degree customer marketing and helping our clients maximize their marketing initiatives.

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